Jeff Gennette: Let’s talk about shrink first. So, as we reported when we talked about it at ICR, there is we built that into our reserve. And so recognizing the trends we have RFID on virtually everything that we do. So, we are doing daily counts on our content. So, we really know what’s going on in the course of our buildings. And so we build that into our shortage reserve and whereas that went higher, we built that into our expectations when we revised our posts or our guidance in the end of January. As it relates to your conversation about our incentives, that’s been in place really since the beginning of 2020. So, when we went to the net cash cost model, we basically then looked at not only our bonuses, but also how we incent our colleagues based on what they get in their annual reviews. So, that is not a temporary and was not a recent action. It’s been in place now for over 2 years.
Tracy Kogan: And has it changed buying behavior, has it €“ I assume if it’s continuing, it’s kind of having the effect that you want.
Jeff Gennette: Yes. When you think about it, a plan is we are on the second €“ the new season starts because of all-in, we are making adjustments on our plans constantly based on customers. So, to be able to react in real time to where customers are signaling interest with what you do with receipts and what you do with markdowns, and how you pull that back into you might have somebody that is planning a business at a particular level, and it’s much stronger than that. You want to make sure you are giving them the receipts and according markdowns to be able to fuel that business. And somebody that is slowing down from an original plan, you want to be able to do that. If you have got those buyers that are owning those particular relationships and they are incented on the original plan, that’s going to incent bad behavior.
And what you really want to do is make sure that you have got behavior that is incenting where the customer is going. So, I think it absolutely has changed the way that our teams are approaching being much more customer-centric and using the assets that we have to respond to that in real time.
Operator: Thank you. The next question is coming from Bob Drbul of Guggenheim Partners. Please go ahead.
Bob Drbul: Hi. Good morning. Just a couple of questions just around pricing and AURs, when you look at what’s happening with the consumer, a number of your vendors have worked to take prices higher and AURs higher. And I am just wondering, do you see €“ any reason to believe that some of the prices will need to come down, or do you feel good about some of these initiatives that have taken place. I am just wondering if you can maybe comment on that, that would be helpful. Thanks.
Jeff Gennette: Hey Bob. So, let me talk a little bit about AUR and then have Adrian kind of reinforce what we are doing with pricing to support that. I think what we are expecting is when you looked at 2022, we had an increase of about 4% in overall AUR. And that was largely ticket increases. I think what you are going to see in 2023 is there is going to be an increase in ticket prices, but not near the level that it was in €˜22. And so when you look at the big change for us in terms of AUR is just having less and lower clearance markdowns that is moving through in the degradation of your overall AUR. We are going to have targeted promotions versus as broad-based as they used to be. And with a right-sized inventory that is really tied to sales demand in real time to customers, it’s never perfect, but we are getting better at allocation.
